Zakat, Tax and Customs Authority (ZATCA) is the e-invoicing implementing e-authority in Saudi Arabia. ZATCA implemented phase 1 w.e.f 4th December 2021 and phase 2 w.e.f 1st January 2023. Further, ZATCA announced that it classifies the taxpayers for phase 2 and notifies them six months before the wave. At present, it announced the following waves:
- Wave 1 under phase 2: Businesses registered under KSA Value Added Tax (VAT) with a turnover of more than 3 billion SAR in 2021 fall under wave 2 w.e.f 1st January 2023.
- Wave 2 under phase 2: Saudi businesses registered under VAT with more than SAR 500 million and less than SAR 3 billion turnover in 2021 fall under wave 2 from 1st July 2023.
- Wave 3 under phase 2: VAT-registered businesses in Saudi having more than SAR 250 million and less than SAR 500 million turnover in 2021 or 2022 fall under Wave 3 w.e.f 1st October 2023.
- Wave 4 under phase 2: Businesses registered under KSA VAT having more than SAR 150 million and less than SAR 250 million turnover in 2021 or 2022 fall under wave 4 from 1st November 2023.
Hence, the applicable taxpayers shall integrate their ERP/POS with ZATCA to generate phase 2 compliant invoices.
e-Invoice generation workflow in SAP ECC ERP
Here’s the e-invoice generation workflow in SAP ECC:
- The entire workflow can be performed in SAP ECC ERP, beginning from invoice generation, PDF A/3 generation, and mailing e-invoices.
- You don’t have to use any other platform and can complete all e-invoice actions in SAP ECC.
- Your e-invoice actions do not delay as end-to-end e-invoice generation and ZATCA approval flow happens immediately.
- You can generate e-invoices in SAP ECC in two ways. Firstly, the user must manually select one or more pending invoices and click “Generate E-Invoice”. In the second way, the e-invoice will automatically be generated once the user creates or approves the invoice in ERP.
Role of middleware in ZATCA integration
Middleware is software that sits between two other components. From the Saudi e-invoicing perspective, middleware is software with APIs to integrate with ZATCA and perform numerous e-invoicing functions.
The e-invoicing middleware comes with the following features:
- RESTful APIs to easily integrate with any ERP/ POS
- Integration without major changes to ERP/POS
- One API to support all e-invoice document types
- Ensures seamless connection with ZATCA
- Uninterrupted generation of e-invoices
- Creation of invoices in PDF/ A3 format with embedded XML
How can ClearTax help you easily integrate SAP ECC with ZATCA?
ClearTax APIs is a middleware connecting the ERP/accounting system/POS and ZATCA’s Fatoora portal to ensure 100% e-invoicing compliance. ClearTax automatically registers hundreds of ERP/POS in a single click with ZATCA and receives a cryptographic stamp for each device.
It comes with below features:
- 150+ smart data validations to ensure data is as per ZATCA specifications and invoices are error-free.
- ClearTax generates mandatory fields such as invoice hash, previous invoice hash, invoice counter value, UUID and QR code.
- We convert the invoice data into ZATCA-specified UBL 2.1 schema in XML format.
- Our API automatically sends invoice data to the ClearTax cloud platform to convert into a ZATCA complaint e-invoice.
- ClearTax adds certified XML & phase II QR code into the existing invoice to generate the final PDF A/3 invoice.
- We archive e-invoice data for up to six years on SLA-based cloud servers.